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Rupee plunges 19 paise to over 2-year low of 66.76 against dollar |
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MUMBAI: The rupee slid to its lowest level in more than two years as overseas investors sold domestic debt securities ahead of US Federal Reserve policy, which is expected to announce hike in interest rates next month.
A falling Chinese yuan too dented sentiment for emerging market currencies as investors seek safety of dollar-backed assets.
The rupee weakened 0.3 per cent, or 19 paise, to 66.76 a dollar on Friday. During the intra-day trading, it dropped to 66.89, the lowest level since September 2013. The currency has fallen 2.2 per cent this month in Asia's worst performance.
So far this month, foreign portfolio investors have net sold securities worth Rs 3,207 crore, the highest monthly outflow after May earlier this year. "Market sentiment is weak ahead of US Fed policy," said Anindya Banerjee, currency analyst at Kotak Securities. "Rupee has mirrored the yuan's loss. Only GST clarifications should help the currency to reverse the falling trend," he added.
The Reserve Bank of India is suspected to have intervened to soften the fall of the local unit as some state-owned banks were seen selling dollars, said dealers. Without such intervention, the rupee would have gone past 67, they said.
The yuan weakened after China had reported a decline in industrial profits.
Forex reserves dip $149.7 million
Meanwhile, India's foreign exchange reserves declined by $149.7 million to $352.365 billion in the week to November 20, due to fall in foreign currency assets, according to RBI data. In the previous week, the reserves had increased by $780.9 million to $352.515 billion.
Foreign currency assets (FCAs), a major component of the overall reserves, fell by $133.5 million to $328.395 billion in the reporting period, RBI said on Friday. FCAs include the effect of appreciation and depreciation of non-US currencies such as euro, pound and yen, held in the reserves.
Source : economictimes.indiatimes.com
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